On January 1, 2017, Spring Fashions Inc. enters into a contract with a southeast retail company to provide 500 dresses for $62,500 ($125 per dress) over the next 10 months. On October 1, 2017, after 450 of the dresses had been delivered (50 dresses per month), the contract is modified.
Required:
1. | Fifty dresses were delivered each month for the first 9 months of 2017. Prepare Spring Fashions’s monthly journal entry to record revenue. |
2. | Assume that the contract is modified to sell, once the original 500 dresses are delivered, an additional 100 dresses at $110 per dress, which is the stand-alone selling price on October 1, 2017. Assume the dresses are delivered evenly in November and December 2017. Prepare the journal entries to record the contract modification. |
Prepare journal entries to record a monthly cash sale on January 31 under the original contract and a monthly cash sale on November 30 under the modified contract.
In: Accounting
Exercise 15-8 Selected Financial Ratios [LO15-2, LO15-3, LO15-4] The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 23,000 Accounts receivable, net 200,000 Merchandise inventory 330,000 Prepaid expenses 8,000 Total current assets 561,000 Property and equipment, net 870,000 Total assets $ 1,431,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 300,000 Bonds payable, 11% 350,000 Total liabilities 650,000 Stockholders’ equity: Common stock, $10 par value $ 120,000 Retained earnings 661,000 Total stockholders’ equity 781,000 Total liabilities and stockholders’ equity $ 1,431,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $ 3,510,000 Cost of goods sold 1,395,000 Gross margin 2,115,000 Selling and administrative expenses 580,000 Net operating income 1,535,000 Interest expense 38,500 Net income before taxes 1,496,500 Income taxes (30%) 448,950 Net income $ 1,047,550 Account balances at the beginning of the year were: accounts receivable, $190,000; and inventory, $290,000. All sales were on account. Required: Compute the following financial data and ratios: 1. Working capital. 2. Current ratio. (Round your answer to 1 decimal place.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 4. Debt-to-equity ratio. (Round your answer to 2 decimal places.) 5. Times interest earned ratio. (Round your answer to 2 decimal places.) 6. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.) 7. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.) 8. Operating cycle. (Round your intermediate calculations and final answer to 1 decimal place.)
In: Accounting
How would you reword these two questions into statements?
4. Does the company have a published code of ethics/conduct (with provisions related to conflicts of interest, related-party trans-actions, illegal acts, and fraud) made available to all personnel and does management require employees to confirm that they accept and agree to follow it? Does the frequency of exceptions undermine the code's effectiveness? Does the code comply will all applicable rules and regulations?
5. Does the company have an ethics/whistleblower hotline with adequate procedures to handle anonymous complaints (received from inside and outside the company), and to accept confidential submission of concerns about questionable ac-counting, internal accounting control, or auditing matters? Are tips and whistleblower complaints investigated and resolved in a timely manner?
In: Accounting
our grandfather left you an inheritance of $105,000 to be paid in 30 years. At an interest rate of 11 percent, how much should you be willing to accept now in exchange for the future inheritance?
In: Accounting
Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a "specified services" business. In 2020, the business pays $60,000 of W–2 wages, has $150,000 of qualified property, and generates $200,000 of qualified business income. Susan also has a part-time job earning wages of $11,100 and receives $3,300 of interest income. Her standard deduction is $12,400.
1.What is Susan's tentative QBI based on the W–2 Wages/Capital Investment Limit?
2. Determine Susan's allowable QBI deduction.
In: Accounting
Remember to show your work if an answer requires a mathematical solution
18. On January 1, Bixby Machine signed a $210,000, 6%, 30-year
mortgage that requires semiannual payments of $7,585 on June 30 and
December 31 of each year. What is the correct journal entry for
recording the second semiannual payment (round interest calculation
to the nearest dollar)?
19. On January 1, $500,000 of 8%, 10-year bonds were sold for
$530,000. The bonds require semiannual interest payments on June 30
and December 31. What is the correct entry for recording the June
30 interest payment on the bonds?
20. Motor Works, Inc. has declared a $20,000 cash dividend to
shareholders. The company has 5,000 shares of $15-par, 10%
preferred stock and 10,000 shares of $20-par common stock. The
preferred stock is non-cumulative. How much will the preferred and
common stockholders receive on the date of payment?
21. Allied Industries, Inc. has 250,000 shares of $7-par common
stock outstanding. They have declared a 7% stock dividend. The
current market price of the common stock is $11/share. What is the
amount that will be credited to Paid-in Capital in Excess of Par
Common Stock on the date of declaration?
In: Accounting
Bell, CPA, was engaged to audit the financial statements of Kent Company, a continuing audit client. Bell is about to audit Kent’s payroll transactions. Kent uses an in-house payroll department to compute payroll data and prepare and distribute payroll checks.
During the planning process, Bell determined that the inherent risk of overstatement of payroll expense is high. In addition, Bell obtained an understanding of the internal control structure and assessed control risk at the maximum level for payroll-related assertions.
Required:
Describe the audit procedures Bell should consider performing in the audit of Kent’s payroll transactions to address the risk of overstatement. Do not discuss Kent’s internal control structure. (AICPA adapted)
Please, type the answer in clear order
In: Accounting
Instructions
In good form (include headings), prepare an income statement, a retained earnings statement, and a classified balance sheet as of December 31, 2020. Then compute the current ratio and the debt-to-total-assets ratios identifying which is a measure of liquidity and which is a measure of solvency.
Accounts payable $ 10,000
Accounts receivable 11,000
Accumulated depreciation—equipment 38,000
Advertising expense 21,000
Cash 4,000
Common stock 90,000
Copyright 4,000
Depreciation expense 12,000
Dividends 15,000
Equipment 210,000
Ford Motor Co. stock (long-term investment) 6,000
Insurance expense 3,000
Notes payable (due 2028) 70,000
Prepaid insurance 6,000
Rent expense 17,000
Retained earnings (beginning) 12,000
Salaries and wages expense 34,000
Salaries and wages payable 3,000
Service revenue 130,000
Supplies 4,000
Supplies expense 6,000
In: Accounting
The board of directors of Amber International Limited (‘Amber’),
a listed company, has decided to raise HK$2,500 million for the
acquisition of a piece of land located in Shenzhen, China, for
property development. The board of directors is considering raising
the requisite funds through the issue of either (i) 3% cumulative
convertible preference shares (2018–23) or (ii) 3% guaranteed
convertible registered bonds (2018–23).
Required
As Amber’s financial controller, advise the board on:
i the merits and demerits of issuing the preference shares and the
registered bonds to be issued by Amber;
ii additional features/rights, which could be added to make the
preference shares and the bonds more attractive to investors;
and
iii which proposal Amber should adopt for raising the new
capital.
Give reasons to support your answer
In: Accounting
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of $640,000. The machine is expected to have a useful life of 5 years (straight line basis) and no residual value. For taxation purposes, the ATO allows the company to depreciate the asset over 4 years. The profit before tax for the company for the year ending 30 June 2017 is $600,000. To calculate this profit the company has deducted $60,000 entertainment expense, and $80,000 salary expense that has not yet been paid. Also the company has included $70,000 interest as income that the company has not yet received. The tax rate is 30%. Required: (i) Calculate the company’s taxable profit and hence its tax payable for 2017. (ii) Determine the deferred tax liability and/or deferred tax asset that will result. Prepare the necessary journal entries at 30 June 2017.
In: Accounting
1. Discuss the purposes of (1) substantive tests of transactions, (2) tests of controls, and (3) tests of details of balances. Give an example of each.
2. Discuss the four business functions that result in sales transactions in a typical sales and collection cycle and, for each function, state the key documents and records involved.
In: Accounting
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made. The pizzeria’s cost formulas appear below: Fixed Cost per Month Cost per Pizza Cost per Delivery Pizza ingredients $ 4.60 Kitchen staff $ 6,170 Utilities $ 740 $ 0.60 Delivery person $ 3.40 Delivery vehicle $ 760 $ 1.60 Equipment depreciation $ 504 Rent $ 2,130 Miscellaneous $ 860 $ 0.20 In November, the pizzeria budgeted for 1,950 pizzas at an average selling price of $20 per pizza and for 190 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 2,050 Deliveries 170 Revenue $ 41,680 Pizza ingredients $ 9,550 Kitchen staff $ 6,110 Utilities $ 950 Delivery person $ 578 Delivery vehicle $ 1,012 Equipment depreciation $ 504 Rent $ 2,130 Miscellaneous $ 868 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
The following data pertains to Efficient Market Investment
software packages in the inventory of the Investment Software
division of Efficient Market Investment Outlets:
Inventory, January 1 | 180 | units at $109 |
Purchases: | ||
May 10 | 120 | units at $107 |
August 18 | 190 | units at $106 |
October 1 | 180 | units at $107 |
Inventory, December 31 | 187 | units |
Answer each of the questions:
1(a). Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the FIFO method.
1(b). Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the LIFO method.
1(c). Determine the unit cost, cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the average cost method.
2. Assume that the replacement cost of each unit on December 31 is $107.25. Using the lower of cost or market rule, find the inventory amount under each of the methods given in 1.
Analyze:
What is the difference between the cost and market value of the
inventory using the LIFO method?
Complete this question by entering your answers in the tabs below.
Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the FIFO method.
|
In: Accounting
Question 19
The following information on selected cash transactions for 2011 has been provided by Mancuso Company:
Proceeds from sale of land $160,000
Proceeds from long-term borrowings 400,000
Purchases of plant assets 144,000
Purchases of inventories 680,000
Proceeds from sale of Mancuso common stock 240,000
What is the cash provided (used) by investing activities for the year ended December 31, 2011, as a result of the above information?
a. $16,000. |
||
b. $256,000. |
||
c. $160,000. |
||
d. $800,000. |
In: Accounting
Information about Vinzant Company’s inventory of one item
follows.
Explanation | Number of Units | Unit Cost | |||||
Beginning inventory, January 1 | 115 | $ | 365 | ||||
Purchases: | |||||||
April | 135 | 370 | |||||
August | 145 | 375 | |||||
October | 120 | 377 | |||||
Ending inventory, December 31 | 115 | ||||||
Questions:
Answer each of the 3 questions by entering your answers in the tabs below.
Compute the cost of the ending inventory under the average cost method. (Round your "average cost per unit" answer to 2 decimal places.)
|
In: Accounting